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Zinc Zinc Market

Commodity
Outlook
News
A collection of articles from Zinc Investing News By Charlotte McLeod
Zinc Market Outlook 2018 Best of Zinc Stocks

Table of Contents
Zinc Trends 2017: Prices at Decade High After Supply Crunch ................................................. 2
Zinc Outlook 2018: Will Prices Continue to Rally? ................................................................... 6
Zinc Forecast 2018: Companies Weigh In .............................................................................. 10
Top Zinc Stocks of 2017 on the TSX ...................................................................................... 13
Top Junior Zinc Stocks of 2017 on the TSXV .......................................................................... 16
5 Top Zinc News Stories of 2017 ........................................................................................... 19

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Zinc Market Outlook 2018 Best of Zinc Stocks

Zinc Trends 2017: Prices at Decade High


After Supply Crunch
What zinc trends rocked the market in 2017? We run through what
happened to the metal this year, from production cuts to falling
stockpiles.

Zinc prices have surged more than 24


percent this year on the back of
production cuts, falling stockpiles and
a weaker US dollar.

In fact, the base metal hit a 10-year high


in August, breaking the $3,000-per-tonne-
mark.

As the year comes to a close, the


Investing News Network is looking back
at the main zinc trends this year, from
surging prices to declining warehouse inventories.

Read on to learn what happened in the zinc market in 2017, from the key supply and
demand dynamics to how analysts thought the market performed in every quarter.

Zinc’s price performance from January 1, 2017 to December 4, 2017. Chart via Kitco.

© 2018 Zinc Investing News 2


Zinc Market Outlook 2018 Best of Zinc Stocks

Zinc trends Q1: Production cuts and smelter charges


During the first three months of the year, zinc prices gained more than 4 percent on the
back of supply worries. Zinc mine output dropped significantly in 2016, largely due to
the closure of MMG’s (HKEX:1208) Century mine and Vedanta Resources’ (LSE:VED)
Lisheen mine; Glencore’s (LSE:GLEN) 500,000-tonne reduction in annual mine capacity
was also a factor.

In Q1, this shortfall appeared to emerge in the refined zinc market. Lower zinc mine
supply pressured smelters to decrease treatment charges — the fees they charge to
process ore into zinc — to historic lows of around $30 a tonne. As a result, some
smelters were forced to cut refined zinc production.

“Everyone is scratching around for mine supply. The winners are the guys who mine the
stuff, the big diversifiers. The losers are the zinc smelters who are fighting for
concentrates,” noted analyst Daniel Morgan of UBS (NYSE:UBS) at the time.

Also in the news was a strike at Noranda Income Fund’s (TSX:NIF.UN) processing
facility in Quebec. It is the biggest in Eastern North America, and the strike increased
worries about refined zinc supply.

Overall, analysts were bullish on zinc at the beginning of 2017, as it was the best-
performing LME metal the previous year. “I could easily see prices getting up to $1.50
or $1.60 this year and continuing the enthusiasm that we got last year,” Brien Lundin,
CEO of Jefferson Financial, said back in January.

Similarly, Andrew Thomas, senior analyst – zinc markets, at Wood Mackenzie, was also
bullish on zinc. “It’s become very difficult to derail the zinc story,” he said earlier this
year. “A recession would do it, possibly,” he added, “but it would delay it rather than
wholly derail it.”

During the first quarter, zinc traded between $2,529 and $2,970.

Zinc trends Q2: Supply worries rise as stockpiles fall


Zinc prices increased almost 2 percent in the second quarter of the year, despite falling
to their lowest level this year in June, when prices touched $2,434.

Declining stockpiles and supply worries supported prices during the period. In fact,
orders to withdraw zinc from LME stockpiles jumped 10 percent, to the highest level in
three years, SP Angel analysts said in a June note. As the quarter ended, stockpiles
touched their lowest level since 2009.

Keeping an eye on stockpile levels is important for zinc-focused investors, as they show
how much zinc is readily available to end users. “Inventory [levels] can swing market

© 2018 Zinc Investing News 3


Zinc Market Outlook 2018 Best of Zinc Stocks

balance and, to some extent, prices too,” CPM Group commodity analyst Yvonne
Li explained in May.

Some market watchers were expecting zinc stocks to continue to fall this year. For
example, in May, Wood Mackenzie’s Jonathan Leng said that he was expecting to see
acute tightness in the zinc market later this year, with stocks “projected to fall to
historically low levels and remain so until 2020.”

Geopolitical tensions during the first half of the year pressured zinc, with investors
turning to safe-haven assets like precious metals and moving away from riskier assets,
such as base and industrial metals.

During the second quarter, zinc traded between $2,434 and $2,776.

Zinc trends Q3: Prices hit decade high


Zinc prices hit their highest level in 10 years in August, breaking the $3,000 mark,
and have traded above that level since then. Supply concerns, a strong demand outlook
from China and a decline in warehouse inventories supported the price rally.

“Improving demand sentiment has been fueled by a resurgence in Chinese economic


growth. However, we continue to look to supply as the primary driver underpinning
increasing zinc prices,” Cormark Securities mining equity research analyst Stefan
Ioannou said at the time.

During the quarter, China started to strictly monitor its domestic production of the metal.
Environmental inspectors targeted zinc mines in Sichuan province, restricting or
stopping some production, which increased supply worries.

Another factor impacting prices was the ease in geopolitical tensions. As a result,
investor sentiment switched to risk-on.“When geopolitical tensions increase again we
would expect zinc prices to be impacted, along with the rest of the LME metals,” CRU
analysts commented in August.

During the period, analyst John Kaiser of Kaiser Research explained that zinc
prices had the potential to soar as a result of China’s environmental awakening.
Similarly, Hard Rock Analyst Editor Eric Coffin said he was bullish on the base metal for
the rest of the year.

During the third quarter, zinc traded between $2,736 and $3,215.

© 2018 Zinc Investing News 4


Zinc Market Outlook 2018 Best of Zinc Stocks

Zinc trends Q4: All eyes on mine production


As mentioned, zinc prices have continued to trade above $3,000 since August. Q4 price
drivers included global supply worries, China’s environmental crackdown and a weaker
US dollar. Output cuts in other key zinc-producing countries have also pushed prices
higher.

“Additionally, reports of declining inventories and the latest demand forecast for the
commodity suggests that the market will remain tight for the foreseeable future,”
analysts at FocusEconomics said in their latest commodities report.

Another sign that the zinc market is tight are the low levels for treatment charges —
those indicate that concentrate supplies are thin, Robin Bhar, head of metals research
at Societe Generale (EPA:GLE), recently commented. “I still think prices need to stay at
this level to get more supply. Spot TCs are still low, they haven’t picked up, so there’s a
need to incentivise more supply,” he added.

During the last quarter of the year, zinc has been trading between $3,129.50 and
$3,369.50.

© 2018 Zinc Investing News 5


Zinc Market Outlook 2018 Best of Zinc Stocks

Zinc Outlook 2018: Will Prices Continue


to Rally?
What's the zinc outlook for 2018? Analysts predict another
great year for the base metal, which reached multi-year highs
in 2017.

Zinc prices trended upward in 2017, and


have now surged more than 21 percent
year-to-date. Luckily for fans of
the base metal, many analysts remain
bullish for 2018.

Supply concerns have hit the refined zinc


market in recent months, with
prices reaching a decade high in August
and continuing to trade above the $3,000-
per-tonne level since then. As of Monday
(December 11), LME zinc was changing hands at $3,092.

Read on to learn more what experts expect in terms of the zinc outlook next year, from
supply and demand to potential price catalysts. All in all, the year looks set to be a good
one.

Zinc outlook 2018: Price performance


In 2016, zinc was the best-performing LME metal, jumping more than 64 percent in 12 months.
In 2017, zinc continued to climb, but at a slower pace; as mentioned, it’s gained over 21 percent
since January.

As the chart below from Kitco shows, zinc’s highest point of the year came in October, when it
hit a more than decade high of $3,369.50. Supply worries and a strong Chinese demand outlook
supported the base metal’s rapid price rally.

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Zinc Market Outlook 2018 Best of Zinc Stocks

Chart via Kitco.

The lowest point of the year for zinc came in June, when prices were trading at $2,435. A
stronger US dollar and risk aversion due to geopolitical tensions turned investors away from the
base metal.

One of the key zinc trends this year has been the depletion of zinc stocks built up over the past
10 years; they have run out due to mine closures and cutbacks.

According to CRU Group, that led to a deeper refined zinc metal deficit and to a drawdown in
global stocks. “We correctly forecast physical market tightening, but the strong price reaction
came sooner than we were expecting,” analysts at the firm said.

Similarly, CPM Group (HKEX:1932) commodity analyst Yvonne Li said that the tightness in the
physical market was the main factor supporting significantly higher zinc prices this year. “[It]
lasted longer than I had expected,” she added.

For his part, Junior Stock Review founder Brian Leni said that while he was expecting higher
zinc prices in 2017, that didn’t translate into gains for the junior zinc stocks as he had
estimated. “Companies with quality projects haven’t received much attention and, for the most
part, have traded sideways in the second half of 2017,” he commented. Zinc CEOs have
also identified this problem.

Zinc outlook 2018: Supply and demand dynamics


As mentioned, zinc prices have remained high in 2017, supported largely by supply-side factors.

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Zinc Market Outlook 2018 Best of Zinc Stocks

According to the International Lead and Zinc Study Group, global refined zinc metal production
is forecast to fall by 1.4 percent this year, to 13.53 million tonnes. However, next year the group
predicts an increase of 3.9 percent, to 14.06 million tonnes.

That said, CRU Group analysts expect around 775,000 tonnes of new zinc mine supply to come
onstream next year, with MMG’s (HKEX:1208) Dugald River mine and Vedanta’s (LSE:VED)
Gamsberg mine being notable contributors to production.

Aside from those projects, Li expects East Siberian Metals’ Ozernoye field project and
Mehdiabad mine to bring new production between 2018 and 2022. “These are expected to help
significantly ease the tightness in the refined zinc market during the later years of the forecast
period,” she said.

Despite those additions, CRU Group analysts believe global zinc stocks will continue to be
rapidly drawn down in the first half of 2018, although this depletion will slow down in the
second half of the year.

“Combined exchange zinc stocks at LME-registered and SHFE-registered warehouses could rise
probably in the second half of 2018,” said Li, explaining that this will be a consequence of
refined supplies rising and demand growth underperforming due to a slowdown in China’s
economic growth.

“[That’s because] the government [will] rein in its debt problems while tackling pollution.
However, because of the sheer size of the Chinese market, demand will increase but at a slower
pace,” she added.

Similarly, CRU Group analysts expect Chinese zinc demand to grow next year, but at a slower
rate. “High prices will also begin to constrain demand growth next year in China and elsewhere,”
they added.

Outside of China, Li expects demand in the US and Europe to increase next year as industrial
activities in both economies continue to gather pace.

With all that in mind, analysts forecast that the refined zinc market will remain in deficit in 2018.
CRU Group estimates that the deficit will moderate from this year’s 750,000 tonnes to around
200,000 tonnes. Meanwhile, CPM Group expects the refined zinc market deficit to reach
400,000 tonnes in 2017, but come off to approximately 220,000 tonnes in 2018.

Zinc outlook 2018: Key factors to watch


As the new year starts, investors should keep an eye on several catalysts that could
impact the zinc market. CRU Group analysts mentioned Glencore’s (LSE:GLEN) mine
output and the price-related response of Chinese mine supply as major factors that
could potentially impact the market.

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Zinc Market Outlook 2018 Best of Zinc Stocks

“Moving into next year, with concentrate stocks exhausted, the degree of the seasonal
winter slowdown in Chinese mine supply will be crucial in determining … refined metal
market tightness,” they added.

Similarly, Li suggested that investors watch winter capacity cuts in China, which depend
on pollution levels and how local governments carry out the winter cuts. “Our base case
is that the winter cuts will happen, and will provide strong underlying support to prices in
the next couple of months,” she explained.

Looking ahead, zinc prices are on track to climb even higher in 2018 than they were this
year. “On an annual average, basis zinc prices could rise to $2,904 this year and $3,154
in 2018,” said Li.

Leni also remains very bullish on zinc, and expects the metal to continue to head toward
$2 per pound, supported by falling global inventories, Chinese mine closures and stable
steel market demand.

However, he noted that investors should watch if Glencore decides to bring its 500,000
tonnes of production back online. “While Glencore’s tonnes wouldn’t hit the market
overnight, I do believe the news would resonate quite quickly, sending at least a
temporary downward spike in the zinc price,” he noted.

Meanwhile, firms polled by FocusEconomics estimate that the average zinc price for
2018 will be $3,009. The most bullish forecast for the year comes from TD Economics,
which is calling for a price of $3,362; Danske Bank (CPH:DANSKE) is the most bearish
with a forecast of $2,650.

For investors interested in zinc stocks, there are many zinc-focused companies to keep
an eye on next year. According to Leni, some of them include Adventus Zinc
(TSXV:ADZN), Solitario Zinc (TSX:SLR), Tinka Resources (TSXV:TK) and Vendetta
Mining (TSXV:VTT).

However, he warned investors that “in a rising zinc price environment, many junior
companies will boast a focus or exposure to zinc. More than ever, it will be paramount
to do your due diligence.”

© 2018 Zinc Investing News 9


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Zinc Forecast 2018: Companies Weigh In


Execs from Rokmaster Resources, Nevada Zinc, Canadian
Zinc, Heron Resources and Canada Zinc Metals share their
zinc forecast for 2018.

Many analysts predicted 12 months


ago that zinc was set to shine in 2017,
and the base metal has lived up to
expectations.

Zinc prices rallied in Q3, breaking the


$3,000-per-tonne mark, and have held
above that level since then. With that in
mind, the Investing News Network
reached out to a number of companies in
the zinc sector to get their thoughts on
what’s ahead for the base metal in 2018.

John Mirko, president and CEO of Rokmaster Resources (TSXV:RKR); Bruce Durham,
president and CEO of Nevada Zinc (TSXV:NZN); Steve Dawson, CEO of Canadian Zinc
(TSX:CZN); Wayne Taylor, managing director and CEO at Heron
Resources (ASX:HRR); and Peeyush Varshney, CEO, chairman and president of
Canada Zinc Metals (TSXV:CZX), were able to provide insight.

Zinc trends 2017: Supply constraints hit the market


Zinc was the best-performing LME metal in 2016 after surging almost 65 percent that
year. At the beginning of 2017, many market participants were expecting the base metal
to continue to shine on the back of supply constraints.

“I expected the metal markets to continue to tighten as the world economy continued to
grow, [with] mineral supply [shrinking] due to several closures and few new discoveries
coming onstream,” Rokmaster’s Mirko said. Meanwhile, Nevada Zinc’s Durham said he
expected tighter inventories and higher prices for commodities, but in particular for zinc.

Canada Zinc Metals’ Varshney also said he expected “LME zinc inventories to continue
to decline and the price of zinc to continue its upward trajectory in response to the
demand/supply imbalance.”

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Zinc Market Outlook 2018 Best of Zinc Stocks

For his part, Canadian Zinc’s Dawson was hoping that the junior mineral exploration
and development market would improve. Heron’s Taylor was also expecting an
improved investment market for commodities with strong fundamentals such as zinc.

But not everything was bright for zinc in 2017, with the market facing some challenges
on the investment side. Heron’s Taylor said investment in zinc projects remained
“erratic,” adding, “the equity financing markets have continued to be volatile, and it
proved challenging to get the timing right.”

He continued, “commodity markets have generally been good; however, the investment
market has been patchy — good interest from private equity groups, tempered interest
from institutional funds and retail has piled into all things battery related.”

Nevada Zinc’s Durham mentioned that one of the most challenging aspects of the
market was to get investors interested in the zinc story. Canadian Zinc’s Dawson
agreed, saying that “trying to explain why even though commodity prices were up,
equities [were lagging]” was challenging this year.

Mirko of Rokmaster also noted that the zinc market was challenged by difficulties in
determining stocks and supply from China, the world’s top zinc-producing country.

Zinc forecast 2018: Supply tightness to continue


As the start of 2018 approaches, CEOs remain positive about the future of zinc
fundamentals and prices.

“[Next year,] the zinc market is expected to continue to tighten and sustain the price as
the global economy continues to strengthen,” Rokmaster’s Mirko said.

Another important factor investors should keep an eye on next year are declining
stockpiles, as they show how much zinc is readily available to end users. “Stock trends
for zinc continue to strongly point to a tighter market, which should support the price,”
Heron’s Taylor said.

Similarly, Canada Zinc’s Varshney expects zinc supply to continue to decrease in 2018.
“I remain very bullish on zinc and expect it will continue to be one of the leaders in the
base metals sector,” he added.

For investors new to the zinc space, Rokmaster’s Mirko suggested focusing on
investing in companies with 100-percent ownership of solid properties in good locations,
and with experienced management.

Meanwhile, Canadian Zinc’s Dawson suggested investors look at companies that are
either developing assets or in production. “Zinc exploration projects, while interesting,
will not be able to catch the cycle and profit from peak metal prices,” he added.

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Zinc Market Outlook 2018 Best of Zinc Stocks

For his part, Heron’s Taylor said investors should do their homework on the commodity
fundamentals, which include basic supply/demand dynamics and stocks. “I think
objectively you still come out with zinc being the best placed for the near term,” he
commented.

Zinc forecast 2018: What’s ahead for companies


As 2017 comes to an end, the CEOs shared some of their companies’ main
highlights this past year and commented on what zinc-focused investors should expect
from them moving forward.

Mirko said Rokmaster hit several milestones in 2017, including obtaining full ownership
of the Duncan Lake zinc project, adding new new management and finding historic drill
core that was long thought to be lost. The company is expecting “world-class drill
results” in 2018.

Meanwhile, Taylor said that the critical milestone for Heron was attaining full
development financing for its Woodlawn zinc-copper project. “We have traded above
the raising price, and with development progress along with exploration results we
would like to see this trend higher as we approach first production at the end of 2018,”
he added.

For his part, Durham said Nevada Zinc made progress at its Lone Mountain project,
completing a 13-core-hole drill program. “We expect to have our maiden resource
estimate out in Q1 next year, so we see that as a very important [upcoming milestone],”
he said.

In 2017, Canadian Zinc received a recommendation for the approval of an all-season-


road from the Mackenzie Valley review board; the company also delivered a positive
feasibility study. According to Dawson, investors should keep an eye out for
details regarding the financing of the company’s Prairie Creek mine, positive exploration
results and the potential for new business combinations.

Lastly, Varshney said Canada Zinc Metals “will consider putting out an updated
resource calculation to include this season’s drill results and [will commence] a
preliminary economic assessment on the Cardiac Creek deposit on the flagship Akie
Property.”

© 2018 Zinc Investing News 12


Zinc Market Outlook 2018 Best of Zinc Stocks

Top Zinc Stocks of 2017 on the TSX


Wondering what the top zinc stocks are? Check out this list
of five zinc companies that have seen share price increases
so far in 2017.
Investors have been enjoying zinc’s price
performance over the course of the year,
and are pleased to see it ending 2017 on a
high note.

Politics in China, warehouse shortages and


closing mines all affected the price of zinc this
year. And of course, some zinc companies
have fared well alongside this price boom. For
that reason, investors are becoming
increasingly interested in finding the top zinc
stocks.

To help with that tough task, we’ve put together a brief overview of five zinc-focused
companies on the TSX that have seen share price gains year-to-date. This list was
generated using the Globe and Mail’s market data filter and includes companies with
market caps above $50 million as of December 13, 2017. Our list of top TSXV-listed
zinc stocks can be viewed here.

1. Ivanhoe Mines (TSX:IVN)


Current price: $4.22; year-to-date gain: 66.14 percent

Ivanhoe Mines explores and develops mineral properties in South Africa and the
Democratic Republic of Congo. Its assets include the Kamoa copper project, the
Platreef platinum–palladium–gold–nickel-copper discovery and the zinc-copper-lead-
germanium Kipushi asset.

The company’s latest news about Kipushi came midway through December, when
it released a prefeasibility study for the project. According to the report, the project has
an after-tax NPV of US$683 million and an IRR of 35 percent based on a long-term zinc
price of US$1.10 per pound; meanwhile, pre-production CAPEX is pegged at US$337
million. Annual production is expected to be an average of 381,000 tonnes of zinc
concentrate over an initial 11-year mine life.

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2. Arizona Mining (TSX:AZ)


Current price: $3.37; year-to-date gain: 37.55 percent

Arizona Mining is a mineral exploration and development company focused on its 100-
percent-owned zinc-lead-silver Hermosa project in Arizona. Hermosa hosts the Taylor
and Central deposits, which the company says are globally significant — in fact, Taylor
is one of the world’s 15 largest zinc-lead deposits, and ranks as one of the highest-
grade deposits compared to similar-sized zinc-lead-silver deposits.

In Q3, Arizona Mining released information on the expansion of mineralization at Taylor


outside the resource outlined in a preliminary economic assessment (PEA) for the
project. In November, the company reported results from high-grade infill and step-out
holes completed as part of work on a feasibility study. Arizona Mining also won an
award for the discovery of Taylor.

3. Trevali Mining (TSX:TV)


Current price: $1.46; year-to-date gain: 29.2 percent

Zinc-focused base metals miner Trevali Mining has four commercially producing
operations. It wholly owns the Santander mine in Peru and the Caribou mine in Northern
New Brunswick; it also has an 80-percent stake in the Namibia-based Rosh Pinah mine
and a 90-percent interest in the Perkoa mine in Burkina Faso. Trevali owns the Halfmile
and Stratmat base metals deposits in New Brunswick as well.

In July, the company acquired the mining lease for the former Restigouche zinc-lead-
silver mine in New Brunswick. The next month, Trevali acquired its stakes in the Rosh
Pinah and Perkoa mines. More recently, Trevali released a combined positive PEA for
Halfmile and Stratmat.

4. Hudbay Minerals (TSX:HBM)


Current price: $9.70; year-to-date gain: 26.3 percent

Integrated miner Hudbay Minerals produces copper concentrate and zinc metal at its
properties across the Americas. The company’s zinc operations include the 777 and
Lalor mines in Manitoba.

A steady stream of news has come from Hudbay throughout the year, with one fall
highlight being its completion of a $242-million equity financing. Most recently, Hudbay
published its Q3 results, boasting $154 million in operating cash flow; that’s up 24
percent from the previous quarter.

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Zinc Market Outlook 2018 Best of Zinc Stocks

5. Lundin Mining (TSX:LUN)


Current price: $7.52; year-to-date gain: 17.5 percent

Lundin Mining operates in Chile, the US, Portugal and Sweden. The company primarily
produces zinc, nickel and copper, with cobalt as a by-product. Its zinc operations
include the Zinkgruvan mine in Sweden and the Neves-Corvo mine in Portugal.

The company’s latest news at the end of November, when it released an operational
outlook and update. In this outlook, Lundin increased its zinc production guidance for
2019, but lowered it for 2020. Overall, the company remains on track to increase its
zinc production by 60 percent over 2018 levels by 2020.

What were your top zinc stocks on the TSX this year? Let us know in the comments
below.

The data for this article was retrieved on December 13, 2017 using the Globe and
Mail’s market data filter. Only TSX-listed zinc companies with market capitalizations
greater than $50 million are included.

© 2018 Zinc Investing News 15


Zinc Market Outlook 2018 Best of Zinc Stocks

Top Junior Zinc Stocks of 2017 on the


TSXV
Which junior zinc stocks listed on the TSXV have seen the
biggest share price gains year-to-date? We list the top five
gainers here.
In the final months of the year, zinc
prices came down from historic
highs seen in Q3. With prices
still faring much better than
previous years, some wonder
if zinc will continue to climb or at
least hold steady.

For the year, zinc prices have


increased over 20 percent, which is
nothing to sniff at. Most recently, the
metal has been bolstered by news that
major miner Glencore (LSE:GLEN) is
planning a lower-than-expected increase in zinc output this year.

As investors become ever more interested in finding the best junior zinc stocks, we’ve
put together a brief overview of five zinc-focused companies on the TSXV that have
seen share price gains year-to-date. Read on to learn what they’ve been up to in 2017.

Data for this article was gathered on December 12, 2017 using the Globe and Mail’s market data
filter; only companies with market caps above $10 million are included. If you think we’ve
missed a company that should be included, please let us know in the comments.

1. Karmin Exploration (TSXV:KAR)


Current price: $1.02; year-to-date gain: 264.29 percent

Karmin Exploration is a mining and exploration company with three projects in Latin
America. It owns the Aripuanã gold project in Brazil, the Cushuro gold project in Peru and it has
a 30-percent stake in the Aripuanã zinc project in Brazil.

It’s been a good year for Karmin, whose share price began the year at $0.27 and peaked in
November at $1.43. The junior zinc stock really began to gain traction after completing a $3.8-
million private placement in February. Shortly after that, it released an updated resource

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Zinc Market Outlook 2018 Best of Zinc Stocks

estimate for Aripuanã with “significantly increased grades.” Later in the year,
Karmin released a preliminary economic assessment for the asset, outlining production of 1.8
million tonnes per year over a 24-year lifespan.

2. Tinka Resources (TSXV:TK)


Current price: $0.62; year-to-date gain: 188.89 percent

Tinka Resources holds the Ayawilca zinc-indium-silver–tin–copper project in Central Peru. The
company has completed a slew of drilling at the property in 2017, and its share price really began
to climb in March, when it discovered a new high-grade zone at the project. Highlights included
62.4 meters grading 5.6 percent zinc from 127.5 meters depth.

One of Tinka’s more recent highlights was the November release of an updated resource
estimate for Ayawilca. According to the company, it was able to more than double the project’s
inferred mineral resource; it is now estimated to hold 42.7 million tonnes grading 7.3 percent
zinc equivalent. Shortly after, the junior zinc stock’s share price shot up again. In its latest
release, Tinka announced the discovery of a new area with “significant mineralization” at zone 3
of Ayawilca.

3. Osisko Metals (TSXV:OM)


Current price: $0.79; year-to-date gain: 166.67 percent

Osisko Metals is a zinc-focused base metals exploration and development company with projects
in New Brunswick and Quebec. Osisko began the year with the purchase of the Brunswick Belt
property, and in the ensuing months acquired a number of other properties.

The company changed its name midway through the year. It made some additional acquisitions
around the same time, and commenting in June that it was in control of more than 40,000
hectares in New Brunswick’s Bathurst Mining District. In the second half of the year, Osisko has
focused on drilling, and in December provided initial results from its Mount Fronsac North
project.

4. Telson Resources (TSXV:TSN)


Current price: $0.70; year-to-date gain: 122.22 percent

Telson Resources is currently advancing two gold-silver-base metals projects in


Mexico. In recent years, its focus has been the Tahuehueto project, and it plans to
begin production there in 2018. The company’s other project is the Campo Morado
mine, which it acquired from Nyrstar (EBR:NYR) earlier this year.

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Zinc Market Outlook 2018 Best of Zinc Stocks

In September, Telson announced a US$5-million loan facility and offtake agreement


with Trafigura Mexico. The company said at the time that the funds would allow it
to recommence operations at Campo Morado, and by October it had restarted
operations for production at the mine. Also in October, Telson signed a “term sheet for a
loan facility and offtake agreement with Trafigura for up to US$15 million to finalize mine
construction at Tahuehueto.”

5. Hannan Metals (TSXV:HAN)


Current price: $0.27; year-to-date gain: 22.73 percent

Exploration company Hannan Metals holds the County Clare zinc-lead-silver-copper


project in Ireland, and is focused on the Kilbricken discovery at the property. The
company kicked off the year by closing of the acquisition of County Clare, closing a
private placement and changing its name.

In May, Hannan began drilling at Kilbricken, and by June it had completed its first step-
out drill hole at the site. It provided a maiden resource estimate for Kilbricken in July,
and continued to drill into the fall. Towards the end of the year, Hannan reported
continued success outside the resource area at Kilbricken, with highlights including 8.4
meters at 8 percent zinc equivalent.

Which junior zinc stocks did you pick this year? We’d love to hear your thoughts in the
comments.

The data for this article was retrieved on December 12, 2017 using the Globe and Mail’s
market data filter. Only TSXV-listed zinc companies with market capitalizations greater
than $10 million are included.

© 2018 Zinc Investing News 18


Zinc Market Outlook 2018 Best of Zinc Stocks

5 Top Zinc News Stories of 2017


It was a strong year for the base metal, which reached multi-
year highs in 2017. Here's a look at the top zinc news stories
from the past year.
Zinc had another great run in 2017. After a bit of a dip in the summer months, it has come
out on top — as of Wednesday (December 13), the metal was sitting pretty at $3,166.94 per
tonne.

Prices were driven by tightening supply, due in part to environmental policy moves made by top
zinc producer China. These actions stimulated further production cuts and mine closures, all in
the face of rising demand.

To find out which news resonated most with investors, we’ve gathered our most popular zinc
news stories of the year. Overall, readers were interested in hearing about zinc’s positive price
action and in seeing what experts had to say about the space.

Scroll on to see which zinc news stories of 2017 grabbed the attention of our investor audience.

1. John Kaiser: “Zinc Prices Have the Potential to


Soar”
Our most popular zinc news story this year was a July audio interview with John Kaiser
of Kaiser Research. During the discussion, Kaiser shared his thoughts
on zinc, gold, silver, nickel, cobalt and tungsten, commenting that he believes the
potential for zinc demand to grow is considerable. He anticipates a zinc supply/demand
imbalance due to China’s “environmental awakening.”

He also noted that zinc prices and stocks could skyrocket if relations between the US
and China break down. In closing, Kaiser reveals his top stock picks, as well as what he
believes investors should know about the current resource space.

Watch the full interview here.

2. Could Zinc Batteries Dethrone Lithium-ion


Batteries?
This June article covers a breakthrough nickel-zinc battery in which a 3D zinc “sponge”
replaces the traditional powdered zinc anode. Created by the US Naval Research

© 2018 Zinc Investing News 19


Zinc Market Outlook 2018 Best of Zinc Stocks

Laboratory, the battery’s energy content and rechargeability can reportedly compete
with lithium-ion batteries.

What are the key advantages of zinc batteries? For one, they are reportedly safer than
lithium-ion batteries. They are also constructed with components that are easier to
source, and are cheaper to make. What will this new alternative mean for zinc stocks
and the sector as a whole?

3. Zinc Prices Climb on Supply Concerns


Published in November, this article looks at zinc’s price action in the later part of 2017.
At the time, zinc was changing hands at over $3,200, spurred by China’s environmental
crackdown. Because China is the world’s top zinc producer, changes in its output play a
key role in pricing.

4. Zinc Stocks Jump After Prices Hit Decade High


Investors were pleased in August after zinc prices flew past $3,000 and hit their highest
level in a decade. Zinc stocks were also on the rise, with major players in the space
recording share price gains. Again there was talk of declining Chinese supply, with
decreases in warehouse inventories also being discussed. Read on to find out the
details.

5. What Needs to Happen for Zinc Prices to Rise?


Earlier in the year, many were asking if 2017 would be another great year for zinc. After
nearly doubling in price in 2016, some wondered if the base metal would stay strong. In
a February report, Goldman Sachs (NYSE:GS) analysts claimed that three elements
would be needed for a price rise to occur. What were they? Read the article to find out.

© 2018 Zinc Investing News 20